VA Home Loan Limits
The VA home loan program is an important way for service members, veterans, surviving spouses, and other eligible people to affordably buy a home in the U.S. This program provides a government guarantee against 25 percent of the loan in most circumstances. Veterans Guide can help you understand the VA home loan limits, including what to do if you have a prior VA loan or partial entitlement.
- A VA home loan limit is the maximum loan amount that the Department of Veterans Affairs will guarantee for eligible veterans, with limits varying based on the borrower’s entitlement and location.
- VA home loans no longer have a maximum limit for veterans with full entitlement.
- For those with partial entitlement, VA home loan limits are calculated based on the county’s loan limits and the amount of entitlement already used.
- Eligibility for VA home loans requires a certificate of eligibility, which can depend on service duration, status as a surviving spouse, or other specific criteria.
VA home loans help veterans get a secure path to homeownership. The Veterans Benefits Administration backs these loans, providing extra security and reducing risks for the lender, making them more likely to offer funding. VA home loan limits depend on whether or not you have used the benefit in the past and, in some cases, where you live in the U.S.
Service members, veterans, surviving spouses, and others might be eligible to receive this benefit through the VA. Veterans Guide can walk you through the process, including what additional eligibility requirements you might have to meet to satisfy lenders.
What Are VA Home Loans?
VA home loans help service members, eligible surviving spouses, and veterans buy, repair, or keep homes. Under the program, the Veterans Benefits Administration offers guarantees to lenders to entice them to approve loans. The program offers several benefits, including:
- No down payment requirement from the VA, although a lender might require a down payment
- Competitively low interest rates
- No need for private mortgage insurance
- Potential to use the VA loan program multiple times throughout your lifetime
The Veterans Administration does not issue the loans. Rather, the government backs the loans, which private lenders then issue.
What Are the Limits for VA Home Loans?
A VA home loan limit is not a limit on the loan you can receive but rather a cap on the amount the VA will guarantee to your lender.
As of 2020, veterans eligible for the VA home loan program with full entitlement do not have any loan limits. The Blue Water Navy Vietnam Veterans Act of 2019 provided this change. Previously, the limit was $144,000. At that time, the government would only guarantee the lender a payment of $36,000 for loans up to $144,000.
You might have to provide a down payment if you have partial entitlement, also called remaining entitlement. For example, you might have partial entitlement if you have a prior VA home loan you have not yet fully paid.
How Do VA Home Loan Limits Differ?
VA loan limits depend on your entitlement and where you plan to purchase a home.
Limits by Entitlement
For applicants with full entitlement, the VA offers the lender a guarantee of 25 percent of the loan amount over $144,000, with no upper limit.
If your loan is more than $144,000 and you have remaining entitlement, most lenders require that your entitlement, down payment, or both are at least 25 percent of the loan amount. If you must provide a down payment, you will receive a reduction on the one-time VA funding fee on the loan.
To have full entitlement, you must meet at least one of the following criteria:
- You have never used the VA home loan benefit.
- You have fully repaid another VA home loan and have sold the property.
- You have used the benefit, had a short sale, and repaid the VA in full.
Full entitlement is different from the 100 percent disabled veteran housing allowance, which provides grants to some people with service-related disabilities.
On the other hand, if you meet one of the following criteria, you might have partial entitlement:
- You are currently paying back a VA home loan.
- You have fully repaid another VA home loan but still own the property.
- You refinanced a VA loan into a non-VA loan and still own the property.
- You have used the benefit, had a short sale, and did not repay the VA in full.
- You transferred the deed of your home to the bank on a previous VA loan.
- You had a foreclosure on a previous VA loan and did not repay the VA in full.
If you have partial entitlement, the VA home loan limit calculation depends in part on where you live.
Limits by County
The VA home loan limit varies by county for applicants with partial entitlement. The VA pays the lender up to 25 percent of the county loan limit minus the entitlement you’ve already used. County limits only apply when you have partial entitlement.
The Federal Housing Finance Agency sets the standard limit. The standard VA home loan limit in 2023 is $726,000. However, in some areas, this limit is higher. For example, the baseline loan limit is $1,089,300 for one-unit properties in Alaska, Hawaii, and Guam.
Because private lenders’ loan rate terms differ under the VA home loans program, the terms and cost of your mortgage might be impacted by your debt-to-income ratio and credit score.
A lender could offer you a jumbo loan if you have partial entitlement. The FHFA would not guarantee this loan, as it exceeds the FHFA’s limits. To qualify, borrowers typically need a very high credit score, good credit history, and a very low debt-to-income ratio.
Who Is Eligible for a VA Home Loan?
To be eligible for a VA home loan, you must receive a certificate of eligibility. You must meet at least one of the following requirements to get this certificate:
- You served 90 or more days during wartime or 181 days during peacetime. This rule generally applies to service members, veterans, National Guard members, and Reserve members. Exceptions might apply if you do not meet the service requirements due to reasons such as hardship, reduction in service, or certain medical conditions.
- You are the surviving spouse of a veteran who has passed away, is missing, or is a prisoner of war.
- You served in the armed forces of a country allied with the U.S. in World War II or as a member of certain organizations, such as a cadet in the U.S. Military.
If you have received a dishonorable discharge, you might also qualify for a VA home loan if you apply for a VA discharge upgrade or undergo the Character of Discharge review process.
The approval for a VA home loan depends on the lender and considers your credit score and debt-to-income ratio. Being aware of the credit requirements is an essential step in securing a VA Home Loan. However, limits are very favorable to people who have low credit scores.
How To Apply for a VA Home Loan
To apply for a VA home loan, you can start by downloading the VA Buyers Guide. The next step is to request your certificate of eligibility from the VA. You can request the certificate online from the VA. Then, you can start the loan application with your lender of choice.
To get a certificate of eligibility, you will need:
- Discharge or separation papers, form DD214, if you are a veteran, former activated National Guard member, former activated Reserve member, or surviving spouse of a veteran
- A statement of service if you are a current service member, National Guard member, or Reserve member who has never been activated.
A statement of service must be signed by your commander, adjutant, or personnel officer and must include the following:
- Your full name
- Your birthdate
- Your date of entering duty
- Years of creditable service, if in the National Guard or Reserve
- Duration of lost time
- Your Social Security number
- The name of the command person signing the form
Depending on the details of your service, you might also need to provide other forms and documentation.
The VA home loan program can be a way to secure home ownership, and you can get help navigating the application process. Contact a representative at Veterans Guide to learn more.
Kevin McVeigh
A member of the Pennsylvania Bar and formerly a partner of a law firm, where he handled a diverse case load, Kevin is the editor of Veterans Guide’s content. He meticulously researches the accuracy of all the information provided by the Veterans Guide website.
